NationStates Jolt Archive

A VERY enlightening interview (http://service.spiegel.de/cache/international/spiegel/0,1518,363663,00.html) with a Kenyan economics expert who explains in great detail why aid is not good for Africa at all.

Exerpts:

Huge bureaucracies are financed (with the aid money), corruption and complacency are promoted, Africans are taught to be beggars and not to be independent. In addition, development aid weakens the local markets everywhere and dampens the spirit of entrepreneurship that we so desperately need. As absurd as it may sound: Development aid is one of the reasons for Africa's problems. If the West were to cancel these payments, normal Africans wouldn't even notice. Only the functionaries would be hard hit. Which is why they maintain that the world would stop turning without this development aid.

...AIDS is big business, maybe Africa's biggest business. There's nothing else that can generate as much aid money as shocking figures on AIDS. AIDS is a political disease here, and we should be very skeptical.

...Why do we get these mountains of clothes? No one is freezing here. Instead, our tailors lose their livlihoods. They're in the same position as our farmers. No one in the low-wage world of Africa can be cost-efficient enough to keep pace with donated products.

...Jobs with foreign aid organizations are, of course, quite popular, and they can be very selective in choosing the best people. When an aid organization needs a driver, dozens apply for the job. And because it's unacceptable that the aid worker's chauffeur only speaks his own tribal language, an applicant is needed who also speaks English fluently -- and, ideally, one who is also well mannered. So you end up with some African biochemist driving an aid worker around, distributing European food, and forcing local farmers out of their jobs. That's just crazy!

...If they really want to fight poverty, they should completely halt development aid and give Africa the opportunity to ensure its own survival. Currently, Africa is like a child that immediately cries for its babysitter when something goes wrong. Africa should stand on its own two feet.

Do read it all.

I agree with most things, but all the entrepreneurship in the world isn't gonna help if there are no roads, no telephone lines and no reliable banking system.
I agree that pretty much all aid money goes into the wrong hands and can do little to help, and that donated goods are pointless anyway, but rather than cut off all aid and hope, I'd use the aid money to directly upgrade infrastructure in these countries.
That'll provide a framework for entrepreneurs to work, for foreigners (and locals) to save and invest and then lead to greater prosperity and thus better governance.

I've often wondered, "What's stopping them from just picking up a plow, or a fishing net, and just getting on with life?"

Us. That's what.

I agree that aid in "handout form" needs to stop. But aid in the form of cancelling debts is still neccesary.

I agree that aid in "handout form" needs to stop. But aid in the form of cancelling debts is still neccesary.
And maybe aid in the way of brute force to help convince some of the corrupt ruling classes to not be so corrupt...

didn't we try that 500 years ago :rolleyes:

I agree that aid in "handout form" needs to stop. But aid in the form of cancelling debts is still neccesary.
Aid in the form of cancelling debts rewards the failures and punishes those who work hard to actually pay their debts back. Like Lesoto (http://news.bbc.co.uk/2/hi/africa/4656987.stm):

Lesotho has worked hard to reduce its debts - now less than $1bn - and so is unlikely to qualify for much debt relief after this week.

"These initiatives are rewarding those countries that have been irresponsible, in that they have not met their obligations," says Lesotho Prime Minister Pakalitha Mosisili.

"We have been punished for meeting our obligations."

The rest of the article, describing the sudden failure of the Lesoto textile industry, is being suspiciously vague about WHY it actually failed. They blame some unnamed and undescribed "shifting winds of the global economy". But the real reason was brilliantly explained by the expert interviewed in the first article:

Why do we get these mountains of clothes? No one is freezing here. Instead, our tailors lose their livlihoods.

I personally think the basic problem is lack of free markets. Europe on one hand and the US use subsidise on there agri products. These need to stop. Also I have heard several reports that price fixing goes on from Europe in machinery and heavy equipment sales. In Morocco where I spend part of the year some food stuffs are outrageously expensive if imported from Europe. While homegrown goods are cheap and plentiful. These practices need to stop.

Just even out the playing field and let the African peoples become competitive in the world markets. The US I know has made gains in Morocco. We are making a free trade pact with Morocco. This will increase exports out of the nation by tenfold. Thus creating jobs and making a better living for the Moroccan people. This also benefits the US people by opening more markets and allowing for greater competition. This needs to be done in conjuction with Europe and offering the free trade zone to any nation in Africa that wants it.

Aid in the form of cancelling debts rewards the failures and punishes those who work hard to actually pay their debts back. Like Lesoto (http://news.bbc.co.uk/2/hi/africa/4656987.stm):
Yeah because you can see what an economic quagmire England, Japan and Germany are because we cancelled their debts.

Someone should cancel the United States' debt.

Someone should cancel the United States' debt.

hehe I agree. But lots of people would be screaming wouldnt they. If your a bond holder that is. Hey wait isnt China a big bond holder! I say we do it!

Yeah because you can see what an economic quagmire England, Japan and Germany are because we cancelled their debts.

You haven't read the first article in this thread, have you?

In Germany's case, only the destroyed infrastructure had to be repaired. Despite the economic crisis of the Weimar Republic, Germany was a highly- industrialized country before the war. The damages created by the tsunami in Thailand can also be fixed with a little money and some reconstruction aid. Africa, however, must take the first steps into modernity on its own. There must be a change in mentality. We have to stop perceiving ourselves as beggars. These days, Africans only perceive themselves as victims. On the other hand, no one can really picture an African as a businessman. In order to change the current situation, it would be helpful if the aid organizations were to pull out.

I personally think the basic problem is lack of free markets. Europe on one hand and the US use subsidise on there agri products.
US subsidies are not normal subidies. Basically we're paying them to not grow food, not vice versa.

That's good stuff. Unfortunately it seems that few people really get it, including the interviewer. "Well that makes a lot of sense, but..." It's not that the money goes to the wrong people. The aid totally distorts the market. The people have no incentive to produce, to invest. Who can risk putting the time and effort into growing more food than their own family can eat, when you'll likely be forced to compete with free food. Why do anything useful at all when some NGO group will pay you 5 times what you could earn elsewhere.

Someone should cancel the United States' debt.
I agree, then they'd be forced to stop deficit spending. Of course, they might try and beat the money out of taxpayers. (I doubt that raising tax rates would increase revenue) But more likely than not, they'd just fire up the printing presses. :rolleyes:

Nevermind, don't cancel the debt.